DEFINITION OF OUTSOURCING
Outsourcing is a business practice where a particular company will hire someone who does not work for their company such as another company or a freelancer to do particular tasks for them. Typically, tasks outsourced will be highly repetitive or specialized tasks such as calling long lists of names with a particular call script, accounting, programming, data entry, technical support, payment processing, or some other specialized task.

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REASONS FOR OUTSOURCING
The reason companies outsource work to other companies are multi-fold. One reason could be to:

Save Time — so that employees and management can focus more on the core competencies of the company such as selling widgets while outsourcing bookeeping and reminder calls to companies who specialize in those particular tasks. Another reason could be:

Cost Cutting — Many outsource companies are located in India, The Philippines, or Eastern Europe where labor costs are lower than the United States, hence, creating an opportunity to capitalize on less expensive labor.

Skill Optimization — is yet another reason to outsource work as outsourced companies specialize in particular tasks such as blog set up, eCommerce site creation or XML conversion while your company specializes in widgets.

Eliminating Uneven Schedules — if you have a job to be done that will take only 10-15 hours a week on some weeks and more or less hours on other weeks, hiring a full-time or even part-time employee is a commitment that you will have trouble keeping. If that employee quits in the middle of a project, you’ll have another problem. It might be easier to outsource the project to a company who specializes in that task and has dozens of people who know exactly how to do it rather than hire your own staff.

Reducing Hiring — hiring and firing is expensive and is an art form that you might not have time to master. If you have a particular job that people are always quitting every two months, it might be easier to have the job outsourced to Manila where they have full-time HR managers to handle the hiring and firing for you! That way you can focus on widgets instead of dealing with people who quit on a whim leaving you high and dry. The outsourced company you hire will have plenty of backups all in the same specialty when the employee assigned to you quits.

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TYPES OF OUTSOURCING ARRANGEMENTS

Freelancers — Some companies hire freelancers which is a type of outsourcing.

Fixed Schedule — Others hire another company for a particular schedule with a contract which extends for a particular number of months or years such as 40 hours a week for two years.

Employee Leasing — Some companies hire a team of workers from an agency which is sometimes called “employee leasing.” Other companies pay for results in specialties like lead generation rather than paying for particular hours of work.

Assignment Based — Programming or software development outsourcing often has a company pay for a completed product or for a particular number of hours to do a particular job although there is very rarely a deadline.

On Call — Some outsourcing is on an on call basis. Programmers might be hire to fix code only when it breaks or to do programming work as needed. Call centers might have a small assignment from time to time only when needed.

ITES — Information Technology Enabled Services which could include data entry using computers, web design, technical support, or other tasks which involve technology to facilitate the task in some type of a way.

KPO — Knowledge Process Outsourcing is also a bype of Business Process Outsourcing that includes tasks that require a higher level of education, knowledge or skills such as Accounting, Software Development, Research, etc.

RPO — Research Process Outsourcing or Recruitment Process Outsourcing. Research outsourcing is popular in Bangalore, India as there are many companies that offer market research, web research, and Pharmaceutical research. RPO could also be a form of human resources outsourcing where an outside company will help you find employees or leased agents. This is by far the least popular form of international outsourcing as there are few providers who offer overseas assistance with recruitment.

HRO — Human Resources Outsourcing as mentioned above is the least popular form of international outsourcing as there are very few overseas companies who offer competent service in this industry. However, there are a few companies in India and the Philippines that allow you to lease call center agents and programmers at low rates. However, the quality of such help is dubious and not guaranteed in any way by the provider company.

MBPO — Medical Business Process Outsourcing includes outsourcing of Medical Billing, coding and Medical Transcription. Quality standards and billing in these fields is a lot more uniform than in other BPO tasks as companies can charge a percentage in Medical Billing and can offer rates per number of characters or words (or lines) in Medical Transcriptions. Quality standards are also easy to measure as there are international standards for Medical Billing and Medical Transcription. You can measure errors as a percentage rate. If a company makes more than a particular fraction of a percent of errors, they generally go out of business or get fired.

Social Media tasks might include article writing, proofreading, posting on Facebook, managing a Twitter account, LinkedIn, Instagram, Pinterest, or any of the other common social media platforms. Most companies specialize in several social media platforms, but cannot provide service for ones they are not familiar with or don’t have sufficient staff for.

There are a few terms in outsourcing that may not be familiar terms to Americans and Europeans. BPO, KPO, and LPO. I have written a blog article about distinguishing BPO from KPO, and LPO. But, let me summarize here.

Any type of outsourcing could be classified as BPO. However, the more highly educated types of outsourcing work fall into the category of KPO, which itself is a broad term. BPO includes any type of data entry, call center, or back office work. KPO includes any type of knowledge intensive services which often include research, analytics, writing, software, and sometimes legal work as well.

Legal Process Outsourcing is a subset of Knowledge Process Outsourcing. Many companies in India specialize in various types of LPO services to please foreign clients. It is interesting that almost all LPO companies in India are located either in the Delhi NCR region, or in Bangalore. There are huge volumes of highly educated people in any of the top ten large cities in India, but these two cities attract certain types of industries.

Typical specialties for Legal Outsourcing companies might include legal research, document drafting, patent research, litigation support, and assistance for foreign companies trying to set up a branch in India. Many companies have a wide variety of other specialties, but for Americans and Australians outsourcing to India, those are the specialties that are the most common.

I read that there were roughly 140-150 Legal Process Outsourcing companies in India, so there are plenty to choose from. 123outsource.net currenly lists over fifty such companies, and we welcome you to browse our search results. We also have many KPO, BPO, medical billing, medical transcription, web design, and software companies that you can browse too!

Bangalore KPOBangalore is India’s main outsourcing hub, and has the highest concentration of KPO companies anywhere in the world. Knowledge Process Outsourcing is a fast growth industry in Bangalore and India as a whole as India is leaning towards more specialized work which most of the highly competitive newer outsourcing nations can not compete with.

Wipro of Bangalore
Wipro, a Bangalore headquartered company, opened up operations in Brazil four years ago and is happy with the performance of their Brazilian employees.

GIIP – Bangalore KPO Training
According to pr.com, a company in Bangalore called Global Institute of Intellectual Property is now offering an eight week training program where post graduate students can learn the skills they need to work in a KPO, LPO, MNC, or R&D company. All of the students in the first batch have been successfully placed in relevent jobs, and more than 75% of the students in the second batch have been placed even before they finished the program.

Research and Development KPO in Bangalore
financialexpress.com’s May 10th, 2010 article called, “Going up the value chain” explains how Indian metros have their various niches in the KPO industry. Bangalore was in stiff competition with Moscow and St. Petersburg for research and development, while Chennai was competing with Guang-Zhou for engineering services. Hyderabad meanwhile was focusing more on healthcare related KPO work. The main point here is that Indian metros are getting more sophisticated in their value offering, and niches are developing in certain areas.

A joke about the Bangalore KPO industry
A young man named Ramesh, a research expert walks into a pub on Church Street in Bangalore. He drinks to excess, falls unconscious, and the next day finds himself in one of Bangalore’s many KPO companies and was told that he would have to work there for the next six months. Ramesh asks, “Have I been Shanghaid?”. The reply was, “No, you’ve been Bangalored!!!”

KPOKPO means knowledge process outsourcing and is a more sophisticated type of BPO. KPO generally refers to accounting, legal, software, and outsourcing that involves research and good analytical skills.

History of BPO & KPO
The history of the Business Process Outsourcing industry dates back to the 1980’s when a handful of European airlines started using Delhi as a location for their back office operations. Later, American Express consolidated its Japan and Asia Pacific back office operations also to Delhi and the NCR region (which is near Delhi). In the 1990’s, General Electric was next to follow suit and start back office operations in Gurgaon, which is a satellite city of Delhi. These initial BPO operations were done using a business model that consisted of parent companies and “captives” which are companies that have an exclusive relationship with the parent company. Independent BPO operations didn’t start until the 1990’s although the industry didn’t have much strength until after 2000.

IT outsourcing
In 2002, all major Indian software companies were involved in the BPO industry including Infosys, Inforlinx, HCL, Stayam, and Patni.. Spectramind was bought by Wipro, and the team that started Specramind, created Quatrro in 2006. Daksh got bought by IBM, and MphasiS was acquired by EDS. Accenture, IBM, Hewlett Parkard and Dell, Convergys and Sitel also created venues in India which created a lot of high paying jobs. These new high paying jobs in India are the reason why the phenonimon of the reverse brain drain from America to India started accelerating from 2004-2009.

KPO Services
Investment research, Business research, Data Analytics, Market research, Valuation, Legal research are the main core of what are considered to be specialties in the KPO business. IT, Software, and Web services can also be considered to be KPO services, although research oriented jobs better reflect how many think of KPOs. LPO means legal process outsourcing which includes a wide variety of legal back office services. An LPO is a type of KPO as well. The distinctions between the various outsourcing terms can get blurry, and terms can have definitions that overlap with other related terms as well. Putting distinctions aside, KPO is a dream come true for India, where they can get a nice market share of higher paying skilled labor and have evolved past the stage of only getting grunt work and software labor.

Biotechnology & Pharmaceutical Research
Indian companies are now engaged in more and more biotechnology, and pharmaceutical analytical work. This is one of India’s most rapidly growing industries in the KPO sector. Israel is also very prominent in KPO as they have many companies who are very advanced in medical research.

Where are KPO’s typically located?
To run successful KPO companies, you need a good skilled labor pool. India dominates roughly 70% of the world KPO market, and each metro in India has a different focus. Delhi is more oriented towards legal, accounting, and call center work. Bombay is more oriented towards business. Hyderabad and Chennai gravitate towards IT, Data, and Transcriptions, while Bangalore is India’s hub for any type of highly skilled technical or analytical work. Bangalore has the highest amount of highly skilled workers of any Indian metro and the majority of higher paying KPO jobs are in Bangalore. Visit our Bangalore KPO page to see search results for KPO companies in Bangalore.

Tweets:
(1) KPO means knowledge process outsourcing and is a more sophisticated type of BPO.
(2) KPO generally refers to accounting, legal, software & outsourcing that involves research and good analytical skills.
(3) The HISTORY of KPO, BPO, and LPO
(4) Looking at a long list of KPO services, what defines them as KPO vs. BPO services?
(5) How do you distinguish what would be classified as a KPO vs. a BPO service?
(6) India dominates roughly 70% of the world KPO market, and each metro in India has a different focus.

KPO companies with a broader scope might get involved in legal research, patent research, document drafting, and litigation support, which are all specialties associated with the more narrow term LPO. Financial research, and accounting analysis work are also common for KPO companies to take part in. A few KPO companies even get involved in India’s new growth industry which is pharmaceutical research. However, the most common types of work that a KPO company would do would include market research, business research, business intelligence, data analysis, market segmentation, marketing strategies, etc. A few firms even do content writing, and other types of technical writing.

123outsource.net has a directory of KPO companies that you can browse to find KPO firms in any part of the world. We have a majority in India, but there are American, Filipino, Latin American, and European companies as well. Additionally, we have a huge selection of global BPO, call center, data entry, medical billing, medical transcription, web design, software development and other specialties as well. We currently have roughly 3000 listings of outsourcing companies and the number is growing at more than 100 per month!

Outsourcing KPO work to India is very popular, because you can gain the services of a very educated team of individuals for a fraction of the cost of what it would be elsewhere.